Micron Stock Forecast: Improving Average Prices of DRAM And NAND Flash Will Propel Micron Higher This Year

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First.

Micron Stock Forecast


  • Micron’s stock is already more than 79% higher than its 52-week low of $9.31 but I still rate it a Buy.
  • Micron’s stock has further upside from the predicted rise in Q3 and Q4 prices of DRAM modules.
  • Stronger sales of mobile DRAM is another tailwind for Micron.
  • Growing sales for mobile NAND Flash is also helping Micron’s topline growth.
  • Go long on MU now because of its strong Buy signals from I Know First’ algorithmic forecasts.

It easy to explain why Micron’s (MU) stock price surged 20% in August. Micron’s fortune is largely influenced by the rise and fall of DRAM memory modules. August was a month wherein average DDR3 and DDR4 DRAM prices surged by 2%. Last month continued the reversal or upward tick of DRAM prices that started last July.

Below are charts shared by TrendForce, parent company of DrameXchange.com, shared last July 5.

Micron Stock ForecastA recovery in global DRAM prices is always great for MU. Micron’s stock hit its 52-week low of $9.31 last January and has lingered near $10-$13 price until June. This was due to the continued decline of DRAM prices. MU’s stock started to rise last August 4 when spot prices of DDR3 and DDR4 DRAM really started to rise above its $12.50 average last July. DRAM prices reached as high as $14 last month.

Micron’s stock price will always rise and fall according to what DRAMexChange reports over average prices of memory modules. As of 2015, the memory business still contribute 60% of Micron’s revenue. Trefis’ forecast chart below expects the core DRAM Memory division to remain a major growth driver of Micron. A small increase in monthly average prices of desktop, server, and mobile DRAM products is therefore a boon for Micron.

Micron Stock Forecast

Supply-chain pressure is also expected to drive DRAM prices higher until the fourth quarter of this year. PC OEMs will likely demand more DRAM modules for new computers they plan to sell this coming December holiday shopping period. I therefore encourage tech investors to add Micron now while it still trades below $18.

I am confident that Micron will trade above $20 again before 2016 ends. Aside from the predicted rise in desktop PC DRAM products, Micron will also benefit from the expected surge in demand for mobile DRAM prices.

Mobile DRAM And NAND Flash Are Also Helping Micron

The September 7 debut of the new iPhone 7 is also going to inspire other phone manufacturers to roll out new Android phone models. I expect mobile DRAM prices to also increase starting this month. Chinese vendors (like Huawei, Lenovo, and Xiaomi) who often copy the iPhone design in their Android phones will likely order more mobile DRAM and NAND flash storage from Micron.

Android phone manufacturers will also ride the shopping season of Q4 2016 to release their Android versions of the iPhone 7. Micron is the third biggest supplier of mobile DRAM, next only to Samsung (SSNLF) and SK Hynix. Apple many not use Elpida mobile DRAM inside the iPhone 7. However, I expect other Android OEMs to use them for their iPhone 7-looking Android handsets.

According to TrendForce, Chinese Android smartphone vendors like Huawei, Vivo, and Oppo were largely responsible for the 17% surge in mobile DRAM sales in Q2 2016. I expect Chinese companies to source out some of their mobile DRAM and NAND flash storage needs from Micron/Elpida.

Micron is also the fourth-biggest supplier of NAND flash storage. Micron’s stock price will benefit from the upcoming need for more NAND flash storage of laptop and smartphone/tablet manufacturers. Due to logistics and supply-chain constraints, not everybody will source out their mobile DRAM and flash storage requirements from Samsung.

In spite being only the fourth-biggest supplier of NAND flash, Micron still generated more than $1 billion in revenue from NAND flash products in Q1. I expect Micron to generate around $1.3 to $1.5 billion from NAND flash storage sales in Q4. Average prices of NAND Flash storage products have stabilized since Q2.


(Source: Statista)


The improving business climate for DRAM, mobile DRAM, and NAND Flash storage products is a strong tailwind for Micron. My end-of-2016 price target for MU is $20. This is notably higher than the consensus price target of $17.42 made by TipRanks-tracked Wall Street analysts for Micron. The 52-week high of MU is also only $19.30.

My high optimism for MU is of course due to my unique advantage. Unlike most analysts in Wall Street, I enjoy access to the deep-learning computers of I Know First. Since last year, I could honestly say that I made good money from betting on stocks based on algorithmic market trend signals provided to me by I Know First.

Micron’s stock currently touts strong Buy signals from the algorithmic forecasts of I Know First. The 1-month, 3-months, and one-year algorithmic forecasts of Micron are all very high. The predictability factors of the 3-month and 1-year forecasts are also above 0.5. The probability is therefore favorable that Micron stock will eventually hit $20 before 2016 ends.


I also believe that the increasingly positive hedge fund activity over MU this year is another notable tailwind for the stock. As per TipRanks data, more Micron shares are being bought by hedge fund managers since Q1.


(Source: TipRanks)

As of June 30 13F filings, more institutional investors are also adding Micron shares. Institutional investors currently account for more than 82% of outstanding MU shares. More often than not, small retail investors should emulate examples set by fund managers. Go long on MU now because institutional and hedge fund managers are in love with Micron again.


(Source: Nasdaq.com)

Lastly, the long-term technical indicators and moving averages of Micron are also still hinting that it is a Buy. I am long  Micron.

Past I Know First Forecast Successes with MU

I Know First has been bullish on MU in recent articles, such as on June 6th, 2016.The article had spoken about an improving macro environment and other improving fundamental factors which would act as a catalyst for MU. Since then, MU had a return of over 27%.

This Forecast was sent out to  I Know First subscribers on June 2, 2016. To subscribe now click here

MU Stock Forecast